AgCountry Farm Credit Services, Farm Credit Services of America (FCSAmerica), and Frontier Farm Credit are sponsoring a webinar series, Two Economists and a Lender. Our April installment featured Agriculture Economic Insights (AEI) co-founders David Widmar and Brent Gloy and Mary Feldhausen, insurance officer. The webinar recording from April 24 is available.
Watch as we unpack the latest data and considerations for the 2025 growing season.
While weather and supplies always are a concern going into a new production season, 2025 presents some risks that could have consequential impacts for producers. Here, we look at some of the key factors to watch in the months ahead.
Local Corn Basis
U.S. farmers are planting a big corn crop. Projections put corn acres at 95 million, similar to 2023. Nebraska farmers plan to plant 650,000 additional acres than in 2023 and Iowa, 400,000 more. In this environment, producers need to watch local basis levels.
Ending Stocks: Two Stories
U.S. ending stocks for a combined 13 agriculture commodities (including corn, soybeans and wheat) are on the rise. Meanwhile, global stocks for the same group of commodities are ticking down. If not for tighter global stocks, commodity prices likely would be softer. The question going forward is which supply story – domestic or global – prevails and shapes markets.
Trade and Tariffs
Seventy-five million acres of the primary crops grown in the U.S. are exported. China buys about a third of those acres, half of which are soybeans. Tariffs put those acres at risk. However, soybeans are in a “safe zone” -- for now. China’s soybean purchases mostly happen in the fall and winter. This provides time for negotiators to reach a trade deal. If there is no deal, the question becomes: Where do those soybeans go?
Government Payments
The adhoc government payment authorized by Congress at the end of 2024 was the one of the biggest in U.S. history. The first tranche was distributed this spring to help farmers cover losses. Still unknown is the allocation process for the remaining two-thirds. A bigger unknown: Will the Trump administration follow the playbook from its first term and provide tariff relief to agriculture? Ad hoc spending by the federal government will have a significant impact on producer profitability in 2025.
Consumer Durability
Consumer demand has been a bright spot in the food industry. Beef and egg prices have reached surprising highs, yet consumers keep buying. In fact, demand for beef has climbed in the past few years, supporting strong profitability in areas of the cow-calf sector. Consumers have been willing to pay more because, on the whole, they also are earning
more. Growing concern about the trade war tipping the U.S. economy into recession could lead to less spending and additional demand headwinds for agriculture.
Control Your Controllables
Crop prices for 2025 are outside your control; your risk management strategy should not be. That is the message from crop insurance agent Mary Feldhausen. Producers still have time to buy hail insurance for the 2025 growing season, and now is the time to take stock of your multi-peril policy to ensure you take full advantage of its coverage. Changes from one year to the next can be easy to overlook or misunderstand. Call your agent if you have any questions.
Then turn your attention to your 2026 policy decisions. It might seem early, but producers have some important decisions on the horizon, including three in September: coverage for winter wheat, margin protection and, new for 2026, margin coverage option.
Conclusion
As spring unfolds, it's important to take a moment to enjoy the new season. Focusing on risk management strategies and staying informed about the evolving economic landscape will help producers navigate the challenges and opportunities of 2025.
